Be Our Guest Case Analysis

1591 Words 7 Pages
Isaac Neal
Be Our Guest, Inc.
Party Rental Equipment Service

Marketing Analysis: Be Our Guest, Inc. is a company that rents out party equipment, such as tables, silverware, and chairs, for events around the Boston area. In 1983, Steve Lizio founded the company and it began as a service that provided wait staff to catering companies, but over time, this idea transformed into a rental company. Be Our Guest is an extremely seasonal company and most of their business comes from the last quarter of the year and their lowest in the first quarter. Be Our Guest, Inc. prices are higher than their competitors, but they believe they provide the best quality of customer service and their inventory. Their excellent customer service gave them the ability
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Although net income decreased 22.8% from 1995 to 1997, because depreciation increased 25.8% from 1995 to 1997, the total net income adjusted for non-cash charges increased by 4% from $250,000 to $259,000, from 1995 to 1997. The changes to Accounts Receivable over the years reduce cash flow from operations by $75,000, $46, $42,633 in 1995, 1996, and 1997, respectively. These increases in accounts receivable cause the cash flow from operations to decrease because Be Our Guest, Inc. collected less money from their customers compared to the sales. Whereas, the changes in Accounts payable & accruals of, $5,768, $19,063, and $14,859, in 1995, 1996, and 1997, respectively, caused the cash flow from operations to increase because Be Our Guest, Inc. is paying their suppliers less, indicating they are retaining more cash for …show more content…
This decrease in net earnings is due in great part to the 120% increase in general & admin. salaries. Be Our Guest, Inc.’s ROE decreased 53% over the four- year span, from 33% to 16%; net earnings and total equity affect this decline. As mentioned, the net earnings decreased 37% from 1994 to 1997, due to greatly to operating expenses such as general & admin expenses; whereas, the total equity increased 34% from $420,000 in 1994 to $562,000 in 1997. The total equity increased, which is a direct result of the 41% increase in retained earnings. The gross profit margin for Be Our Guest, Inc. increased by 54% from $.96 million to $1.47 million from 1994 to 1997. This increase is a result of a 49% increase in sales but also the COGS decreasing by 3.5%. The operating profit margin decreased by 25% and the net profit margin decreased by 37% from 1994 to 1997. The decrease in OPM and NPM is due to the huge increase in general & admin expenses/ salaries. In addition, the NPM is also affected by the 35% increase from -$28,000 in 1994 to -$38,000 in 1997 in the net interest owed. Be Our Guest, Inc.’s ROA decreased roughly 54%. This decrease is due to decrease in net earnings, 38%, combated by a 35% increase in total

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